Obama: Important for All Governments ‘Boost Demand’ and Counter Deflation
RUSH TRANSCRIPT:
BARACK OBAMA: "It was our strong belief it was important for us to make the invest managements to boost demand to put money in the pockets of consumers to strengthen and forty identify the banking system so we wouldn't see bailout of irresponsible practices on wall Street. The best way to bring down the deficit was not to cut spending but to grow the economy. As well as investment and importance for long term growth.
"I think we've already is succeeded in stabilizing economy and putting it on growth trajectory. We've now seen five straight years of job growth. We've gone from 10% unemployment down to 5.5%. We've done this while reducing the deficit by two-thirds primarily because the economy grew much faster. It's been my view with the respect to Europe that it's not an either or situation. Sometimes it gets framed with what's the right answer for Europe? Is it austerity or structural reform? My attitude is yes, you need structural reforms.
"If labor markets are stuck, it's hard to hire, particularly young people. If there's too much bureaucracy to start a new business, business gos elsewhere or talented entrepreneurs start business somewhere else. I think prime minister Renzi's government is on the right track in initiating structural reforms Angela Merkel and others have called on for a long time, but what I've also said is that at a time of such low demand and hints of deflation that we were seeing over the course of several years, boosting demand is also important.
"Having flexibility and meeting fiscal targets is also important that the sustainability of structural reforms depends on people feeling some sense of hope and progress. If all it is just getting squeezed but there's no growth, then over time the political consensus breaks down and not only do you not get structural reforms but you also end up reverting to some of the old patterns that didn't work.
"So I think that the approach that Mateo is describing is the right one. Move forward on structural reforms but have flexibility and strategy for increasing demand, increasing investments. If -- by the way, here in the United States, we're not done. I'd like to see us reb infrastructure across this country. That's a smart idea. It would put people back to work, boost demand. More workers would be employed. They would then spend money. You get a virtuous cycle. It's something we need to do to stay competitive.
"This is not just Europe. Globally all of us have to realize global demand is weak. China is making necessary transitions towards a more consumer based rather than export based economy. That means they're not going to be growing as fast. That in turn has meant suppliers of raw materials to China see a their economies soften. What I've said to Europeans is don't expect the United States is simply going to be the engine for everybody. Don't expect you can just keep on selling to the United States. We can't sell anything to you because your economy is so weak. That won't benefit anybody. Those are concerns I've expressed across the board."
